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Filing returns and payments of excise tax UAE

UAE Excise tax plays an essential role in the revenue system of the United Arab Emirates (UAE), ensuring that businesses engaged in the importation of excisable goods contribute appropriately. Businesses must comprehend the procedure of submitting excise tax returns and ensuring prompt payments to adhere to regulations and prevent penalties. This guide will lead you through the fundamental stages of filing and paying excise tax returns in UAE, offering concise insights in accordance with Federal Decree-Law No. 7 of 2017.

Filing Excise Tax Returns in the UAE

Consider the following points to understand the filing procedure for excise tax UAE

  • How and When: Businesses are required to file their excise tax returns through the Federal Tax Authority (FTA) portal. It's important to note that manual returns are not accepted. The filing process is facilitated by an online form available in both English and Arabic. The tax period for each return spans one calendar month, and submissions should be made within fifteen days of the end of the tax period.
  • Submission Process: Once on the FTA portal, details from previous declarations are automatically populated into the excise tax return. However, the responsibility lies with the taxable person to diligently review and ensure the accuracy of the information before submission. After this verification, the excise tax return can be submitted online, accompanied by the necessary tax payment.

Importing Excise Goods into the UAE

  • Non-Registered Importers: For those exempt from excise tax registration, known as non-registered importers, the process involves logging onto the FTA website to complete an import declaration. This declaration calculates tax liability based on the standard price list. However, if the price is not available on the FTA list, a self-declaration becomes necessary. Importantly, payment precedes Customs clearance in this scenario.
  • Registered Importers: Registered importers follow a similar procedure but with a slight difference. Tax liabilities are not payable until the excise tax return is filed. Customs clearance occurs first, and the import declaration details are automatically associated with the importer's tax registration number, streamlining the process.

Excise Tax Payment Workflow

  • Online Portal Payment: The process of paying excise tax is streamlined through the FTA online portal. Once the business owner initiates the payment, the FTA redirects it to the eDirham Payment Gateway. Upon successful processing, a confirmation message is sent to the taxpayer.

Deadlines and Refundable Tax

  • Submission and Payment Deadlines: Deadlines are crucial in the world of excise tax. Excise tax UAE returns must be submitted within 15 days after the tax period, with corresponding tax payments due 15 days after the end of the calendar month. If, by chance, these deadlines fall on weekends or holidays, they elegantly shift to the next working day. Make sure that you have good accountants at your back tracking all these deadlines for you so that you don’t miss them.
  • Refundable Tax: Sometimes, the FTA refunds previously paid excise tax. In these instances, taxable persons can deduct this value from the total payable on the next month's excise tax return. It's a helpful feature that ensures fairness in the tax system.

Consequences of Late Excise Return Filing 

  • Penalties and Fines: The importance of filing excise tax returns on time cannot be overstated. Late filing comes with its set of consequences, including daily fees, interest on outstanding tax, and administrative penalties. In severe cases, the FTA may resort to legal action against businesses repeatedly failing to file their excise tax returns on time, potentially leading to criminal convictions and additional fines. Nevertheless, businesses can avoid such circumstances by keeping in touch with qualified tax consultants.

Responsibilities After Importing Excise Goods 

  • Tax Reporting and Payment: Importers, post-importation, bear the responsibility of paying the excise tax promptly. This involves submitting accurate excise tax returns that detail the imported goods, including the retail price, applicable tax rate, and the amount of excise tax payable. The process also requires providing necessary documentation and making timely payments to the FTA.

In conclusion, staying well-informed about the excise tax return filing and payment process is not only a regulatory necessity but also a strategic move for businesses operating in the UAE. By adhering to deadlines and ensuring the accuracy of submissions, businesses can maintain compliance and, more importantly, avoid penalties imposed by the Federal Tax Authority. Incorporating the expertise of tax agents into the excise tax UAE compliance process can be a strategic move for businesses in the UAE. Their role extends beyond mere assistance; tax agents become partners in ensuring accurate, timely, and cost-effective compliance.

Choose the Best Excise Tax Consultants

Ensuring timely excise tax filing and meeting other payment obligations demands constant vigilance. Any lapses in adhering to deadlines or potential mistakes in tax return submissions may result in significant penalties. To steer clear of such situations, enlist the support of our skilled tax consultants. Get in touch with us today, and we'll be more than happy to provide our assistance.

Read More: Excise Tax Facts: Everything You Need to Know

Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions.